How To: Set Up An Offshore Bank Account

For some guys, an offshore bank account may sound like something out of a James Bond film or maybe a clever way for an arms dealer to conduct business. But the truth is that lots of guys use offshore accounts for a variety of reasons. It may sound sexy to talk about an offshore account, but for the most part, banking offshore is about saving on tax dollars.

But if taxes aren’t a concern, liability may very well be — in which case offshore banking limits a creditor’s access to your funds (different country, different law). Finally, there are some guys who don’t need that Swiss bank account, but open it while on vacation because what better pickup line is there than dropping “my Swiss bank account” into the conversation?

If any of those reasons sound like they match your own motivations, here’s how you can open an offshore bank account.

Legal issues

If you’re a U.S. citizen, it’s not illegal per se to open an offshore account. If the underlying reason, however, for setting up the account is an illegal act, you might be keeping your money safe, but you could still be in hot water. For example, if you’re accused of tax evasion and you’ve sent the funds abroad, you could still face criminal charges here. The offshore bank account, however, may remain free from the long arm of the law.

Risk

When you bank in the U.S., you can be secure in the knowledge that your money is insured by the government. No such guarantees exist with offshore banks. In other words, a country could have a coup or a natural disaster or an accounting scandal one day and all the money could be gone the next. Furthermore, you could find yourself scammed; it does happen. Remember, this is a business built on skirting the law, so you won’t always deal with the most honest people (but that varies by country).

Should you keep your cash in Switzerland or the Caymans? Decisions, decisions…